Climate & Carbon Management

The Company conducts materiality analysis through sustainability-themed questionnaires, which identify climate change as a material topic. Accordingly, in accordance with the "Risk Management Policy and Procedures," climate change risks are incorporated into the scope of management, and appropriate response measures are taken to reduce risks to an acceptable level. To strengthen the identification and management of climate change risks, the Company refers to the TCFD framework to identify climate-related risks and opportunities, formulate response measures and target plans, aiming to mitigate the impact of climate change risks on business operations and enhance climate resilience.

(1) Climate Scenario Settings

• Transition Risk: The Company refers to the IEA WEO 2023 report and sets the future climate environment as "global temperature increase of 1.5°C", and takes "Taiwan 2050 Net Zero Emissions and Strategy" and "Climate Change Response Act" into scenario considerations and assessment. The possible impact of each risk event under future climate scenarios.
• Physical Risk: To prepare for the most severe climate-related disasters that may occur in the future, the Company referenced the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6) under the SSP5-8.5 high-emission scenario, along with relevant data from the National Science and Technology Center for Disaster Reduction, including disaster potential maps, climate change projections, and adaptation knowledge platforms. Based on this information, the Company identified and assessed whether each plant may be affected by climate change or extreme weather events under future climate scenarios.

(2) Climate Risk Identification and Assessment

The Company's assessment of climate change risks and opportunities is based on three risk factors—"hazard," "vulnerability," and "exposure"—to determine the "impact/relevance" and the "likelihood of occurrence" of each risk to Chipbond, and to develop a climate change risk matrix. This assessment identified five medium- to high-level climate risks from a total of 15 climate risks. The transition risks include "carbon fee imposition," "low-carbon technology transformation," "customer requirements for renewable energy usage," and "government policy requirements for net-zero emissions." The identified physical risk is "damage to buildings and facilities caused by typhoons, strong winds, and heavy rainfall." In addition, three climate change-related opportunities were identified through the risk assessment process. Corresponding response strategies have been developed to reduce the potential negative impacts of climate change on the Company's operations. The results of the climate change risk identification and assessment, together with the corresponding response measures, are presented below:

Response strategies for the significant climate-related risks and opportunities identified above are as follows:

The potential financial impacts of climate change-related risks and opportunities are described as follows: